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Exploring the nexus: Foreign aid, war on terror, and conflict in Pakistan

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  • Nasir, Muhammad
  • Rehman, Faiz Ur
  • Orakzai, Mejzgaan

Abstract

This study explores the nexus between foreign aid, war on terror, and terrorism in Pakistan for the period 1972–2010. By making use of Johansen method of cointegration, the paper concludes that, contrary to the popular assumption, there is no association between foreign assistance and conflict in Pakistan. However, the impact of foreign aid on terrorism is positive in the long run during the war on terror period. Furthermore, the positive impact of GDP on terrorism mirrors the fact that militants consider terrorist attacks a feasible option compare to open war in face of enhanced state capacity. The study also unearths the non-linear U-shape relationship between political repression and violence in the long run.

Suggested Citation

  • Nasir, Muhammad & Rehman, Faiz Ur & Orakzai, Mejzgaan, 2012. "Exploring the nexus: Foreign aid, war on terror, and conflict in Pakistan," Economic Modelling, Elsevier, vol. 29(4), pages 1137-1145.
  • Handle: RePEc:eee:ecmode:v:29:y:2012:i:4:p:1137-1145
    DOI: 10.1016/j.econmod.2012.04.004
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    References listed on IDEAS

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    1. Jean-Paul Azam & Véronique Thelen, 2008. "The roles of foreign aid and education in the war on terror," Public Choice, Springer, vol. 135(3), pages 375-397, June.
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    Citations

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    Cited by:

    1. Qayyum, Unbreen & Din, Musleh-ud & Haider, Adnan, 2014. "Foreign aid, external debt and governance," Economic Modelling, Elsevier, vol. 37(C), pages 41-52.
    2. Rehman, Faiz Ur & Nasir, Muhammad & Shahbaz, Muhammad, 2017. "What have we learned? Assessing the effectiveness of counterterrorism strategies in Pakistan," Economic Modelling, Elsevier, vol. 64(C), pages 487-495.
    3. Muhanji, Stella & Ojah, Kalu, 2016. "Governance infrastructure and indebtedness of African countries: Do regional blocs matter?," The North American Journal of Economics and Finance, Elsevier, vol. 36(C), pages 123-153.

    More about this item

    Keywords

    Foreign aid; War on terror; Terrorism; Pakistan;

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • F35 - International Economics - - International Finance - - - Foreign Aid

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